Supply chain opportunities in the car sector

Published: 21 Nov 2016
By Evelyn Adams

The success of the UK’s automotive sector is leading to lots of exciting engineering opportunities throughout the supply chain. Evelyn Adams reports

Britain’s automotive supply chain received a welcome boost last month with Nissan’s announcement that it was to build new models in the UK. The firm, which is the UK’s largest car manufacturer, committed to building its new Qashqai and X-Trail SUV at its Sunderland plant.

Post-Brexit, the move provides some much-needed confidence to British car manufacturers. Around 28,000 supply-chain jobs in the UK are currently supported by Nissan, among a wider 78,000 dependent on British-based vehicle manufacturers. If other manufacturers follow Nissan’s lead, then growth in the supply chain will continue, creating career opportunities for engineers at all levels.

The success of firms like Nissan is driving opportunity throughout the supply chain. Pictured: Nissan’s Sunderland production line

“We are a key supplier to Nissan in the UK and globally, with 1,400 staff in the north east alone, so the decision to build two new models in Sunderland is excellent news,” said John Barnett, vice-president manufacturing and supply chain for Calsonic Kansei, which supplies a variety of automotive components for car manufacturers worldwide. “A significant proportion of the components used to manufacture cars at the plant originate from us. In future, the opportunities are now there for us to win even more business.”

There is currently an estimated £6bn opportunity for component manufacturers, according to the Society of Motor Manufacturers and Traders (SMMT). Billions of pounds have already been invested in domestic supply-chain networks to fulfil production needs and cut the cost of logistics. This investment is having an impact, with the car industry being one of the UK’s biggest manufacturing success stories. Over the past five years, the number of British-built cars has risen from 36 per cent to 41 per cent with the potential to reach 50 per cent in the near future.

Experts believe that trend will continue. But the sheer rate of the industry’s recent growth has resulted in a skills shortage. The Automotive Council said that up to 5,000 vacancies currently exist in UK automotive manufacturing. Two in five respondents to a recent SMMT supply-chain member survey said that the availability of skilled workers, apprentices and graduates could impede their company’s growth over the next three years.

“Automotive engineers – from blue- to white-collar roles – are in high demand across the sector,” said Les Hewlett, head of automotive at recruitment firm, Matchtech. “The full impact of Brexit remains unknown; however, a study conducted last year by the SMMT projected that the UK alone will benefit from 320,000 new jobs by 2030 with the development of connected and driverless cars. We are therefore confident that it will have a limited effect, although the roles will change. But to support that growth, the industry needs to attract the right talent.”

The top two most critical roles needed in the automotive supply chain are design and production engineers. Skills in lean manufacturing, advanced problem solving and tool making are also in high demand. But the roles are ever changing and, looking to the future, engineers with skills across the board will be needed. “It is also a very exciting time to be starting a career in the automotive industry; the rise of the connected car means we are expecting more change to the cars we drive over the next 10 years than we have in the last 100,” said Hewlett.

With the skills shortage are constant concern, some businesses are changing their recruitment requirements with roles opening up to those wishing to transfer their skills from another sector. “There are lots of opportunities for engineers in the UK’s automotive supply chain – and we support all entry routes,” said Tamzen Isacsson, SMMT director of communications and international. “Transferring from another sector such as rail, marine, aerospace or energy is perfectly possible as there are plenty of synergies. SMMT has hosted events to bring skills and knowledge that exists in other sectors into automotive. We are very keen to continue this, and welcome companies and skilled staff from other industries looking to work into automotive – diversification is key.”

Jaguar Land Rover’s Castle Bromwich plant

Hewlett said: “Skills are in short supply though so we don’t expect this to set wages back negatively. More specifically, we have witnessed skill-set spikes; electrical design for example has seen a 14 per cent hike in contract hourly rates in the past 12 months, which happened almost overnight.”

Working for a small engineering firm has some major advantages. SMEs are often the ones driving innovation and can get their ideas to market faster without being bound by rigid hierarchical structures. Smaller teams that are more flexible in terms of change value creativity.

SMEs also offer great opportunity to progress rapidly through the ranks, and many benefit from being able to provide one-on-one contact with senior-level engineers who can act as mentors to new recruits.

The divide between leadership and those on the ground floor is also usually smaller, allowing management to get a more realistic understanding of what everyone’s role involves.